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Tonya
"Cyniquian" Level Poster
Username: Tonya
Post Number: 7570
Registered: 07-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 10:50 am: | 
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Stocks Sink, with Dow Below 10,000
Video:
http://www.businessweek.com/investor/content/oct2008/pi2008106_846441.htm?chan=t op+news_top+news+index+-+temp_news+%2B+analysis
Equity markets in Europe and Asia also tumbled Monday amid the widening global financial crisis
U.S. stocks were trading sharply lower Monday morning, with the Dow industrial falling below the 10,000 level. Investors fled equities amid a growing global banking crisis.
Goldman, others see longer, deeper
recession than originally thought. The Fed increased the size of its 28 and 84 day
Term Auction Facilities to $150 billion each.
The U.S. dollar index was surging Monday on speculation the European and U.K. central banks will cut interest rates. Bonds and gold futures were higher in a flight to safety. Oil futures skidded below $90 per barrel on prospects of lower demand.
At around 10:05 a.m. ET Monday, the blue-chip Dow Jones industrial average was lower by 327.35 points, or 3.17%, at 9,998.03. The broader S&P 500 index shed 41.62 points, or 3.79%, to 1,057.61. The tech-heavy Nasdaq composite index tumbled 80.51 points, or 4.13%, to 1,866.88. The declines followed Friday's losses of 1.5% for the Dow, 1.35% for the S&P 500, and 1.48% for the Nasdaq.
On the New York Stock Exchange, 29 shares declined in price for every one share that gained. The ratio on the Nasdaq was 22-3 negative. Trading was active.
European stocks plunged as the banking crisis widened. In London, the FTSE 100 index fell 5.53% to 4,704.94. In Paris, the CAC 40 index dropped 5.71% to 3,847.67. Germany's DAX index sank 5.07% to 5,503.21.
Asian markets finished with sharp losses. Japan's Nikkei 225 index fell 4.25% to 10,473.09. In Hong Kong, the Hang Seng index slumped 4.97% to 16,803.76.
As traders pondered details of the U.S, financial rescue plan enacted Friday, they also eyed reports that European banks were considering guaranteeing bank deposits but Germany, France, Britain, and Italy decided against a coordinated bank bailout, while vowing to stabilize markets.
Dollar index surging
on speculation European, U.K. central banks will cut rates. Bonds and gold
futures higher in flight to safety. Oil futures skidding.
The U.S. dollar index was surging Monday on speculation the European and U.K. central banks will cut interest rates. Bonds and gold futures were higher in a flight to safety. Oil futures skidded below $90 per barrel on prospects of lower demand.
No major U.S. economic reports were scheduled for Monday. Federal Reserve Chairman Ben Bernanke was set to speak Tuesday at the National Association for Business Economics annual meeting in Washington. Minneapolis Fed President Don Evans and Dallas Fed President Richard Fisher speak at the gathering on Monday.
Developments in Europe held the spotlight Monday. During the weekend, leaders of Europe's four biggest economies -- Germany, France, Britain and Italy -- decided against a coordinated bank bailout, while vowing to stabilize markets. Italian Prime Minister Silvio Berlusconi later said Italy would revive the idea of a common bank bailout fund at a meeting of finance ministers on Monday. The other three countries shot the idea down. Expectations are building that a meeting of finance leaders from the Group of Seven major industrialized nations, scheduled for this week in Washington, could set the stage for coordinated interest rate cuts.
In the banking industry, France's BNP Paribas scooped up the assets of Fortis in Belgium and Luxembourg for €14.5 billion to stem a cash drain on Fortis and Dexia. German officials clinched a revised rescue deal for lender Hypo Real Estate that will see commercial banks and insurers provide €15 billion in liquidity, on top of an initial pledge of €35 billion.
The German government will not legislate to formally increase safety for German savers, according to a BBC report. Chancellor Angela Merkel's commitment was a political one that no German savers would lose any money, according to BBC business editor Robert Preston, who suggested that her undertaking was similar to that offered by U.K. Chancellor Darling. There were fears over the weekend if Germany offered 100% then the U.K. would have to follow. Merkel said over the weekend that all savings were secured.
"If the commitment leads to a change in legislation, or if this is a safety net offered on an ad hoc basis, it seems clear that Merkel's comments were meant as an effective 100% guarantee for deposits in savings and current accounts, which according to a government spokesman amount to €568 billion," says Action Economics. The spokesman said that the step was designed to prevent a bank run, says Action Economics.
Sweden, following Germany's pledge to guarantee private deposit accounts, said it would expand bank deposit guarantees and the central bank increasing the amount of loans offered to its banks. Austria, Denmark, and Ireland issued the first such guarantees last week.
This put pressure on other countries, such as Britain, which face the prospect of a drain in deposits from their less-guaranteed banks.
Separately, the Bank of Japan it offered to lend 1 trillion yen against pooled collateral in an auction to inject liquidity into the market and the Bank of England said it would offer $10 billion in an overnight repo operation. South Korea's finance minister said the country would dip into the world's sixth-largest foreign exchange reserves to help with loans. Another source of concern is Iceland, where officials, including from the central bank, have been working on a financial stability plan to address a crisis that has sent the country's currency spiraling lower and is seen as threatening its financial sector.
On Monday, Reuters reported that overnight dollar deposit rates were indicated around 1.0%-2.55% in London, holding close to the Federal Reserve's 2% target rate and well down from levels of over 10% seen in September after the demise of Lehman Brothers. The ECB and BoE liquidity provisions helped European banks meet their demand for greenbacks to fund their dollar-based liabilities and market exposure. Overnight euro deposit rates were indicated in a range of 3.75%-4.35%, close to the ECB's base rate of 4.25%. Three-month dollar deposit rates were indicated as high as 5.10%. That was higher than Friday's fixing of three-month London interbank offered rates by the British Bankers Association of 4.33375% and ICAP's three-month dollar New York Funding Rate of 4.7318%. Rates for three-month euros were indicated in a range between 5.20% and 5.30%.
The cost of borrowing overnight funds on international money markets remained close to central banks' targets on Monday thanks to continued liquidity injections but lending was virtually non-existent across all maturities.
Meanwhile, in the U.S., the Federal Reserve was pushing Citigroup (C) and rival Wells Fargo (WFC) to compromise over their competing bids for hobbled Wachovia Corp. (WB) that could result in them carving up its assets. Wells Fargo said an appellate court has entered an order vacating New York Supreme Court Justice Charles Ramos's order of Oct. 4 that granted emergency injunctive relief extending the exclusivity agreement between Citi and Wachovia until further order of court.
Hartford Financial Services Group (HIG) announced a binding deal with Allianz SE (AZ), which provides for a $2.5 billion capital investment. Hartfor said Allianz will buy, at $31 per share, $750 million of preferred shares convertible to common stock after receipt of applicable approvals, $1.75 billion of 10% junior subordinated debentures. Hartford expects an $8.50-$8.80 third quarter loss per share (including $7.05-$7.25 in net realized capital losses), and $1.50-$1.60 core EPS before the effect of a DAC (deferred acquisition costs) unlock.
Fitch downgraded National City Corp. (NCC) and its National City Bank subsidiary's long and short-term Issuer Default Ratings (IDR). National City Corp.'s long-term IDR has been lowered to BBB+ from A while the bank's long term IDR has been lowered to A- from A. The bank and holding company's Individual rating has been lowered to C from B. Fitch placed all ratings on Negative Rating Watch.
Fitch said the near future is unlikely to offer National City Corp. any relief, and may very well result in additional asset quality problems as the economy weakens.
In other U.S. markets Monday, the 10-year Treasury note was higher in price at 104-01/32 for a yield of 3.518%, while the 30-year bond climbed to 108-24/32 for a yield of 3.998%.
The dollar index was up 0.49 to 81.41.
November West Texas Intermediate crude oil futures were off $3.93 to an eight-month low of $89.95 per barrel amid market worries a global recession will reduce demand.
December gold futures were up $43.20 to $876.40 per ounce in a flight to safety from a widening credit crisis, which is causing a banking crisis.
Among other stocks in the news Monday, ImClone Systems (IMCL) and Eli Lilly (LLY) announced that the boards of directors of both companies have approved a definitive agreement under which Lilly will acquire ImClone through an all cash tender offer of $70 per share, or about $6.5 billion.
eBay (EBAY) expects to hit the low end of its third quarter revenue guidance, but exceed GAAP and non-GAAP EPS guidance. Separately, EBAY acquired U.S.-based online payments business Bill Me Later for $820 million in cash and $125 million in outstanding options. It also acquired Denmark's leading online classifieds site for $390 million in cash. The company plans to reduce its global workforce by about 10%, affecting about 1,000 employees, expected to result in pretax restructuring charges of $70 million-$80 million.
Ceradyne (CRDN) announced that it has received a contract for both its XSAPI and ESAPI personal ceramic armor plates from the U.S. Army RDECOM, Aberdeen Proving Grounds, Maryland. Ceradyne said the total amount of contract is approximately $2.37 billion and covers a period of approximately five years. |
Chrishayden
"Cyniquian" Level Poster
Username: Chrishayden
Post Number: 7469
Registered: 03-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 10:59 am: |
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Thank God we had that bailout!
Without it, Stocks would have sunk below 10,000!
The Stock Market is way overvalued. There is much more air to come out of it before its over--it may continue to sink to about 8,000
It may fall through the floor, I don't give a damn.
As for everybody who got their 401 (k)s and retirement in stock--
You got screwed again, just like in all the other crashes.
Now, somebody will start in about how nobody teaches this, etc.
People been warning about this for years. |
Disciple724
Veteran Poster
Username: Disciple724
Post Number: 191
Registered: 07-2008
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 11:20 am: |
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I guess all the big wigs on wall street are panicking!!! Not!
This sell off is there for those that don't know any thing about the markets but were in there speculating.Look at what has happened after every so called crash! Up, Up, Up. Its when the smarest make the most money.
Is Exxon going out of business, are you ready to retreat to the caves? Are you ready to go hunt for food?
If someone is selling then someone is buying and smart money is looting the ignorant again. When you own shares you own a part of a business. And the same way you wouldn't sell a good business for a temporary set back applies here as well.
Now I don't know if this is the financial collapse which the Scriptures speaks of (probably), but if it is all that green paper that you put your faith in will not be worth spit fella, so all of your gloating will be for nought.
Isn't that back by the full faith and credit of the same government that screwed everything else up? Besides, you're loving McCain and the Republicans so you should be really pleased.
So Chris, what should we do? |
Chrishayden
"Cyniquian" Level Poster
Username: Chrishayden
Post Number: 7471
Registered: 03-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 11:48 am: |
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So Chris, what should we do?
(I don't know what YOU should do.
Me--I'm gonna have a ball.
This is my time) |
Chrishayden
"Cyniquian" Level Poster
Username: Chrishayden
Post Number: 7473
Registered: 03-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 11:58 am: |
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These will be good times for dope men, liquor salesmen and distillers, repo men, undertakers, pimps, and vultures. |
Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 12911
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 12:00 pm: |
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The human condition is a state of flux. Time brings change. Booms and busts come in cycles. This current financial crises is being encapsulated and viewed through the lens of the media. In the immediacy of our day-to-day lives, people will find a way to survive - or thrive. And so it goes. |
Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 12912
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 12:27 pm: |
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Americans on all levels meander through life, indulging themselves, opting for what they want over what they need. In a time of crises, they are required to buckle down and cut back. What seemingly has happened now is that they can no longer go into debt so the people they owe are the ones who are up the creek. |
Carey
AALBC .com Platinum Poster
Username: Carey
Post Number: 1245
Registered: 05-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Monday, October 06, 2008 - 12:33 pm: |
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Chris, you do have a good point. We have been born and raised in the briar patch, it's home.
I think you may be right. Bush and the boys are probably having a wennie roast as we speak. Yes sir, Rudolph and Tyrone are probably on the grill.
I didn't see any empty seat in the ballparks. I'd liked to see the figures on beer and ho's. They call it stumbling monday. Let the good times roll  .
Isn't that what Reagan was talking about? You know, that trickle thang. Pimps up and trickle down. |
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